CE Final Exam RE, The CE Shop Test, Real Estate Final Exam-with 100% verified solutions 20, Exams of Business Administration

Download CE Final Exam RE, The CE Shop Test, Real Estate Final Exam-with 100% verified solutions 20 and more Exams Business Administration in PDF only on Docsity! CE Final Exam RE, The CE Shop Test, Real Estate Final Exam-with 100% verified solutions 2024-2025-tutor verified 340Q&A ______ is a process in which an appraiser determines a probable range of values for a property by comparing a group of comparable sales to the subject. The appraiser attempts to include both superior and inferior units of comparison, such as age, transaction price, etc. Bracketing Bridging Substituting Surrounding Bracketing The number of properties available describes this factor that influences value. Demand Scarcity Transferability Utility Scarcity Related to demand, and reflects the supply of property, or lack thereof. Which of the following statements about agents and the duty of obedience is true? An agent can ignore a client's instructions if they negatively affect the agent's commission. An agent should carry out the client's instructions as long as they are within the law. An agent should never question a client's instructions. The duty of obedience extends beyond the termination of the agency agreement. An agent should carry out the client's instructions as long as they are within the law. Carson is purchasing a $600,000 property by obtaining an 80/20 loan. How much is Carson financing? $120,000 $420,000 $480,000 $600,000 $480,000 Appraiser Niles uses ______ to determine a range of values based on comparing a subject property to comparable sales. He makes sure to use some comparables that lack features of his subject property, and others that have even more desirable features, to balance out the comparison. Bracketing Competition Correlation Substituting Bracketing What does REO stand for? Real estate office Real estate owned Rental equality ownership Rental equal opportunity Real estate owned Which of these transactions would require the Missouri licensee to provide written disclosure of his or her interest? Henry is the listing agent for a vacant property in the condo complex where he lives. John is the listing agent for his neighbor's house. Sally is the buyer's agent for a couple that was referred to her by her previous client. Step is her father's buyer's agent. Step is her father's buyer's agent. Missouri license law requires that licensees provide written disclosure of any ownership interest they have or will have in a property. "Interest" also includes being the spouse, parent, or child of a party to a real estate transaction. How many feet are in three yards? 12 Nine Six Three Nine Stanley is having second thoughts about taking his neighbor to court over a written agreement they have concerning who pays the rent on a storage unit that they share, because it's used to store stolen merchandise. Stanley doesn't think the contract will stand up in court. What type of contract does Stanley have? Executed Valid Void Voidable Void The informational form that explains the different types of agency representation and transaction services available to real estate consumers in Missouri is known as the __________. Agency Disclosure Form Brokerage Relationship Disclosure Form Listing Agreement Disclosure Form Missouri Broker Disclosure Form Missouri Broker Disclosure Form Which of the following is true about an attorney's opinion of title? It protects buyers from material defects. It's no longer required anywhere. It's the document that notes the cloud on the title. It uses public records to validate property transfers. It uses public records to validate property transfers. An attorney's opinion of title provides a legally valid opinion of a property's ownership history. The attorney's scope of information is still limited to what's available in the public records. Which term involving trespassing is used when someone other than the owner claims title to real property? Adverse possession Dedication by deed Judgment lien Lien holder Adverse possession What's designed to protect buyers from financial loss if the title to the property they buy has defects? Abstract of title Chain of title Title insurance Title search Title insurance Which of these is an example of illegal market allocation? Based on licensee expertise, Uptown Homes agrees with County Cottage Realty to focus exclusively on suburban, rather than rural, homes. Christopher's brokerage firm decides to focus on listings in the $350,000 to $475,000 price range. Lamborn Realty Group and Your Choice Real Estate each discuss with their licensees where the most lucrative deals can be found. To advocate and negotiate on behalf of both parties To disclose the agent's relationship with the buyer To obtain the highest price possible To provide comparables to support the buyers offering. To disclose the agent's relationship with the buyer Jasper has a new listing, and he appoints Esther as his sub-agent. Esther brings Julie, a buyer customer, to the transaction, and Julie buys Jasper's listing. What's true about the agency relationships in this situation? Esther owes her loyalty to the seller Jasper is the sub-agent to Esther. Jasper is the sub-agent to the seller. Julie is the sub-agent to Jasper. Esther owes her loyalty to the seller Sandra enters into a contract to sell her home to Paul. Under the statute of frauds, in order to be legally enforceable, the written contract must name the contracting parties, identify the subject matter of the contract, and ______. Achieve a result that is fair to all parties Be handwritten Be signed by two or more attorneys Present the essential terms and conditions of the contract Present the essential terms and conditions of the contract Which of the following statements is true regarding earnest money in Missouri? Earnest money is rarely the subject of lawsuits against real estate licensees and their brokers. Earnest money must be placed in an escrow account within 10 banking days of receipt. The amount of earnest money is non-negotiable. The seller specifies the amount of the earnest money the buyer will deposit and when the deposit will be made. Earnest money must be placed in an escrow account within 10 banking days of receipt. Heath leases space in a commercial building for his sporting goods store, and the building owner insisted on having Heath sign a percentage lease. Under the terms of a percentage lease, Heath must pay ________. All of his net income to the property owner A percentage of his sales to other tenants in the building A percentage of his sales to the property owner A percentage of the rental rate of charity A percentage of his sales to the property owner With which type of government power can a lien be placed on a property, giving the government a claim to the property? Eminent domain Escheat Police power Taxation Taxation The Johnsons are shopping for a mortgage loan and are attracted to the below-market interest rate offered for the first year of an adjustable rate mortgage. What's this type of rate called? Bait and switch Balloon payment Fixed rate Teaser rate Teaser rate Land, plus all things permanently attached to it naturally or artificially, is ______. Interest Private property Real estate Real property Real estate A Missouri salesperson is selling her own property as a For Sale by Owner listing. What information must be included in any advertising she does? Her broker's name and license number Her broker's name and phone number Personal advertisements arent required to include any of the items Sally has just submitted her application for a Missouri real estate salesperson license. She zoned out and forgot to include her check for the fee. What's the worst thing that could happen as a result? Her license could be delayed Her license could be denied She may have to pay a penalty She may have to re-apply Her license could be denied A defect on a title that can be monetary or physical is called an ______. Agreement Appurtenance Encumbrance Eviction Encumbrance A fee a lender charges for processing a loan is called _______. A buydown A loan origination fee A loan servicing fee An appraisal fee A loan origination fee Which of these property management situations is NOT an exception to the federal Fair Housing Act? A private club may restrict the rental or sale of its property to members (as long as the property is not offered to the general public) Owners of building with two or more floors and units available on the ground-level floor can restrict those ground-level units to disabled tenants. Religious organizations that sponsor housing may restrict residency to members of that organization as long as the religion doesn't discriminate against protected classes when allowing membership in the organization. Senior housing facilities or communities may refuse to sell or rent properties to families with minor children or those younger than 55 Which of these activities is legal in Missouri? Give away pens to any open house, showing, or listing attendees. Hold a lottery for those who've entered into a contract to lease a unit in a new building. Offer prizes conditioned on a listing of a property. Use contests to influence potential purchasers. Give away pens to any open house, showing, or listing attendees. When an appraiser relies on comparable properties to estimate the adjusted market price of a property, the appraiser is using the _______ approach. Cost Income Market value Sales comparison Sales comparison One of a seller's agent's duties is to ______. Keep the buyer informed Market and sell the property Negotiate for the buyer Represent the buyer while making sure that none of the seller's advantages are lost. Market and sell the property What's a certified opinion or estimate of value of a particular property as of a particular date? Appraisal Assessment Evaluation Inspection Appraisal The Knolls are purchasing a property and are concerned about the title. They want to have a title search performed. Who can perform a title search? A property inspector A title insurance company The Knolls Racial discrimination Religious discrimination Sex discrimination Familial status discrimination What are the two categories of comparison when evaluating comparables to a subject property in the market comparison approach? Broad and specific Components and measures Elements and units General and detailed Elements and units There are two categories of comparison: elements, which look at physical and locational characteristics, and units, which look at the numbers. Which of the following equals one furlong? 16.5 feet 220 yards 2.47 acres 7.92 inches 220 yards Which type of events are generally on a title insurance policy's schedule of exceptions? Claim from an owner with an unrecorded deed. Claim that was filed on the public record before a title insurance policy's effective date. Liens or claims that aren't on the public record. Mechanic's liens filed prior to a title insurance policy's effective date. Liens or claims that aren't on the public record. Katrina's business card has the REALTOR® logo on it because Katrina respects the National Association of REALTORS®, although she is not yet a member. This is _________. A violation of consumer protection laws. A violation of real estate law. Commingling Okay, as long as she plans to become a member within one year. A violation of real estate law. Which of the following types of training/course might be one that the Missouri Real Estate Commission would consider for a core course requirement to fulfill the CE requirements for real estate licensees? An hour-long monthly sales promotion meeting held as part of general real estate brokerage activity. A three hour course on commercial brokerage. A three-hour training on office skills A two-hour course on agency relationships. A three hour course on commercial brokerage. Which agency duties survive termination of an agreement? Accounting and loyalty Confidentiality and accounting Confidentiality, loyalty, and accounting Reasonable skill and care, confidentiality, and loyalty Confidentiality and accounting Which of the following is considered an act of discrimination under federal fair housing laws? Renting only to Catholics Renting to a married lesbian couple Renting to a white man who has good credit Showing a property to qualified buyers only Renting only to Catholics What exactly is a deed? A mortgage An instrument of conveyance An interest in personal property Chattel An instrument of conveyance In real estate contracts, which are required: legal descriptions or street addresses? Legal descriptions are required, because they provide less ambiguous and more complete descriptions of properties than street addresses provide. We have an expert-written solution to this problem! Kris made an offer on Lincoln's townhouse. However, Kris offered no earnest money. If Lincoln accepted her offer, would it be binding? Yes, because the offer to buy is the consideration. What types of leases must be recorded? Leases that are longer than seven years Which of these is an example of a rectangular survey system description? S ½ SE ¼ NW ¼ Section 2, Township Clarkson Jorge is a dual agent in a single-license dual agency situation. He owes his clients all of the following fiduciary duties EXCEPT ___________. undivided loyalty Shelly buys Mark's house, which is still in an option period with Monique. Monique decides to exercise her option after Shelly moves in. What will happen? Shelly will have to sell the house to Monique. (If the optionor/seller sells land that's under an option contract within the option period, the new owner is bound by that contract, and the optionee may enforce the option against the new property owner.) Your client exchanged one property for a similar property and did not have to pay capital gains taxes that year. How did he do this? He did a tax-deferred exchange. Soundproofing and decorative material, shingles, and siding may contain what hazardous material? Asbestos Wayne conveys a property to Robbie until Robbie's death, when the property is conveyed to Tiffany. What is this scenario an example of? Life estate Life Estate A freehold estate granted for someone's lifetime Ex. Emma wrote her will out to include possession of her home to her nephew for the term of his life, after which it would pass to her favorite charity, Cats and Canaries. Which agency enforces federal fair housing laws? FHEO FHA The Federal Housing Administration (FHA) is an agency of the U.S. Department of Housing and Urban Development. It sets underwriting standards for loans it insures, but it doesn't make loans. Ex. Rita obtained an FHA loan, allowing her to put just 3.5% down, and she also appreciated that her loan's credit score requirements weren't as strict as for conventional loans. SFHAs special flood hazard areas (SFHAs) Areas designated as prone to flooding; used to determine cost of flood insurance Ex. Brady lived in a special flood hazard area and was required to carry flood insurance by his lender. Jay's new loan to purchase a property includes the seller's existing mortgage. This type of loan is called a ______ loan. Wrap-around What's the National Flood Insurance Program? A program that helps homeowners in flood hazard areas obtain insurance What is one drawback of a real property transfer? Taxable gains real property Real estate, plus the interest, benefits and rights included with ownership Ex. Real property can be segmented into a bundle of rights, with each right sold separately, to different owners. When assigning a contract, the assignor should ensure that ______ is not prohibited in the purchase contract. Assignability In a life estate, all of the following apply during the term except ______. Transferability If a rectangular building were 40 feet by 20 feet, the area would be ______. 800 square feet The ease with which the property can be conveyed to another describes which factor that influences value? Transferability What do you call the person who or entity that oversees trust or escrow money? Escrow agent You're trying to impress your neighbors, who are considering selling their house. You'd like to get the listing. They ask you about a listing your firm has that's been on the market forever. Why isn't it selling, they want to know? You answer: "Just hasn't found the right buyer yet, I guess." Which of the following occurs when a property owner dies without having a will in place, and no heirs or creditors can be found? Escheat Escheat The state's power to claim the estate of a deceased person who left no wills, heirs, or creditors Carl is interested in purchasing a lot that is 200 feet wide by 600 feet long. The seller has it priced at $800 per acre. How much would this lot cost? $2,204 (The lot would cost approximately $2,204. First find the area of the lot by multiplying 200 by 600 (this equals 120,000 square feet). Convert the area to acres by dividing 120,000 by 43,560 (the number of square feet in an acre). Multiply this number by $800 per acre.) Lenders will require which type of fund for taxes and insurance? Reserve fund To effect a transfer of title by deed, _________________ must occur. Delivery and acceptance Which term refers to a permitted deviation from current zoning restrictions that allows an owner to use land for a purpose that's otherwise prohibited, and requires the owner to prove the zoning creates an unnecessary hardship? Use variance Kevin, your buyer client, signed a contract to buy Lydia's home. The contract states that "time is of the essence." You correctly advise Kevin that this means ______. The parties are agreeing to proceed in good faith and not unduly delay the process You have a client who has an investment property valued at $400,000. Annual cap rates are 8%. What can your client expect in net operating income? $32,000 When operating under a power of attorney concerning the transfer of real property, who may sign in place of the principal? Agent Jamal is a real estate licensee. What's his responsibility regarding household lead hazards? He must remind the sellers to disclose the possible presence of lead-based paint to a buyer if the home was built prior to 1978. In relation to appraisals, what's a "federally related transaction"? A real estate transaction in which a federal financial agency or regulatory authority is involved What's the amount a lender charges a borrower for using the lender's money? Interest interest (financing) The percentage fee charged on the amount loaned. Ex. Annual interest on a loan can be determined by multiplying the rate of interest by the principal balance. interest (property) The right or claim a person has to property Ex. As a beneficiary to her grandmother's will, Susie has an interest in both the farm house and and the mountain chalet. How many approaches to value do appraisers generally use? Three Easements are a type of encumbrance that can affect a property. Which of the following is true about easements? Easements are often established by a written agreement between the parties. Google and "if this, then that" alerts can assist you with which of the following? Monitoring your online listings for rental scams What instruments are commonly used to secure the purchase of real property? Mortgage and deed of trust The power of the state to claim property when the owner dies without a will and without locatable heirs or creditors is also known as ______. Escheat Which of the following is a residential dwelling with attached walls, where the owner also typically owns the land on which the home sits? Townhome First-time homebuyers can access up to $________ of their Roth IRA accounts, penalty-free, under certain conditions. $10,000 Which of the following is the best definition of a covenant between a lessor and lessee? An agreement or promise made between the parties Cultivated crops are considered personal property even though they're part of the soil, and they're known as _______. Emblements Emblements Growing crops, such as Christmas trees or corn, which are produced annually. These are usually not considered fixtures, but are the personal property of the person who planted them. (Considered personal property) Fiona signed an agreement to either buy or not buy Nick's vacant lot for $310,000 by a specific date. What's this agreement called? An option Which of the following is a material fact that must be disclosed to prospective buyers? A lead-based paint disclosure must be included since the home was built in 1957. Co-ownership with inheritance rights is what kind of real property ownership? Tenancy in common Which option best describes a delivery and acceptance of a deed as required? Which of these items should real estate professionals help first-time buyers and buyers who have experienced recent credit issues to understand? Appropriate financing Which act introduced the "innocent landowner" defense that states that a landowner isn't responsible for clean-up of contamination that occurred prior to their ownership, provided they have not tried to cover up the contamination and can prove due diligence in investigating the property when it was purchased? Superfund Amendments and Reauthorization Act (SARA) Which of the following terms best describes real property? Built-in A buyer can submit the earnest money deposit in the form of __________. A personal check Jose, who is 16, entered into a contract to sell a condo he owned. Because Jose is a minor, ______. Only Jose may void the contract (Minors may not be bound by legal contracts; however, an adult entering into a contract with a minor may be bound.) To prepare for financing, buyers should ______. Save the down payment amount It's not a good idea to post photos of your clients' expensive belongings. Why is that? It can attract the attention of thieves. The earth's surface, extending downward to the center of the earth and upward to infinity, including permanently-attached natural objects, is called ______. Land The courts use three primary tests to determine whether something is personal property or real property. What are the names of the three tests? Method of attachment, agreement, and adaptation In the sales comparison approach, the appropriateness of the various comparable sales in relationship to the subject is considered in a process known as ______, where certain factors may be given more weight. Correlation What is typically used to prove there are no encroachments on the property? Survey What is the definition of a testator? A person who drafts a valid will What's a certified opinion or estimate of value of a particular property as of a particular date? Appraisal When an appraiser relies on comparable properties to estimate the adjusted market price of a property, the appraiser is using the _______ approach. When an appraiser relies on comparable properties to estimate the adjusted market price of a property, the appraiser is using the _______ approach. Maryland real estate licensees should be aware that, in addition to the federally protected classes, the state's fair housing laws also prohibit discrimination based on the protected classes of ____________. Marital status, sexual orientation, gender identity, and source of income What agency enforces fair housing laws in Maryland? The Commission on Civil Rights The ______makes it illegal to send unsolicited commercial solicitations via fax without the recipient's permission or an established relationship. Junk Fax Prevention Act of 2005 If Rina wants to pay off her mortgage early, what might she consider before doing so? Whether she'll incur a pre-payment penalty Real estate Land, plus all things permanently attached to it naturally or artificially Real property Real estate, plus the interests, benefits, and rights automatically included with real estate ownership Improvements Permanent, man-made attachments that include things such as fencing, buildings, and walkways The 5 rights Real Property include: enjoyment, disposition, possession, control and exclusion Exclusion Right to refuse other interests in your property Disposition Right to determine how, when, and whether the property is to be sold, leased, mortgaged, or transferred Possession Right to occupy the property Control Right to determine interest in the property for others Enjoyment Right to possess the property without harassment or interference Exclusion Right to refuse other interests in your property Disposition Right to determine how, when, and whether the property is to be sold, leased, mortgaged, or transferred Broker Any person, partnership, association, or corporation who, for another and for compensation of any kind, negotiates any form of real estate transaction. Real estate brokers supervise and are responsible for the activities of associate brokers and salespersons who work for them. Associate Broker A licensed broker who chooses to work under the supervision and name of another licensed broker Requirements for salesperson license Age 18+ , 60 Hour pre-licensing course, must be of good character and reputation, 15 Hours every 2 years of continuing education Requirements for brokers license 18 +, 3 years as a lawful and and active salesperson (3 years of experience is required, practical minimum age is 21) must be of good character and reputation, 135 hours of real estate courses including 3 hours of real estate ethics. (Renews license every 2 years) Brokers AND Salespersons renew their license every: 2 years Brokers renew their license every: 2 years Salespersons renew their license every: 2 years Test taking ID requirements You will need two forms of ID: your primary ID, which includes a government-issued photo, and a secondary ID with a valid signature. Test taking registration requirements Servient estate Estate at sufferance Estate at will Estate for months Periodic estate What factors does the underwriter consider in reviewing a mortgage loan application? Cost approach Income approach Revenue approach Sales comparison approach enforceable contract Unilateral Contract Valid Contract Voidable Contract A contract that may be legally avoided at the option of one or both of the parties. PHIFA the Maryland Protection of Homeowners in Foreclosure Act New Maryland licensees pay a fee into the Guaranty Fund to help maintain it. What is the amount of the fee? $20 Octogenarians Gertie and Frank met in Sunset Living, a skilled nursing center for people with advanced Alzheimer's disease, where they're both residents. They fell in love and get hitched, signing a marriage certificate. This is an example of a(n) ______ contract. a. Executory b. Implied c. Invalid d. Valid c. Invalid When a prospective homebuyer isn't represented, what doesn't she have? a. An agency agreement b. A seller's agreement c. Responsibility to pay the seller's commission d. The legal right to purchase a. An agency agreement What's a foreclosure? a. A property sale that occurs in less than one week b. A sale that fails to receive a high enough bid at auction and then falls to the bank's ownership c. The forced sale of a property due to the borrower defaulting on the mortgage loan d. The sale of a property when the market value of the home is less than what is owed, plus closing costs c. The forced sale of a property due to the borrower defaulting on the mortgage loan _______ can be defined as everything that's not real property. Which of the following is a residential dwelling with attached walls, where the owner also typically owns the land on which the home sits? a. Apartment b. Condominium c. Single-family detached home d. Townhome d. Townhome A ______ is the expected rate of return on an investment. a. Capitalization rate b. Cash flow c. Income ratio d. Profit margin a. Capitalization rate A borrower makes the same monthly mortgage payment for the entire term of the loan. At the end of the loan period, all of the interest and principal is paid off. This is known as a ______ loan. a. Fully amortized b. Growing equity c. Negative amortization d. Reverse annuity a. Fully amortized In Illinois, how are commissions commonly split between the listing brokerage and brokerage that represents the tenant? a. 100% to the brokerage that finds the tenant b. 20% listing brokerage, 80% brokerage that finds the tenant c. 50% listing brokerage, 50% brokerage that finds the tenant d. 80% listing brokerage, 20% brokerage that finds the tenant c. 50% listing brokerage, 50% brokerage that finds the tenant Carolyn is representing John in the sale of his home. Which listing agreement clause gives her additional authority and obligates her to distribute the listing to other brokers? a. Broadcast clause b. Broker extension clause c. Marketability clause d. Multiple listing clause d. Multiple listing clause _______ are artificial attachments to land that include items such as fencing, buildings, and walkways. a. Emblements b. Encroachments c. Improvements d. Levies c. Improvements Violators of the Sherman Antitrust Act may be subject to fines. For what amount may corporations and individuals be liable? a. Up to $100,000 for corporations and $1,000 for individuals b. Up to $100 million for corporations and $1 million for individuals c. Up to $10 million for corporations and $1 million for individuals d. Up to $1 million for corporations and $100,000 for individuals b. Up to $100 million for corporations and $1 million for individuals What happens to a joint tenant's share of property when the joint tenant dies? a. The joint tenant's interest goes to the remaining joint tenants. If only one joint tenant is left, that joint tenant owns the property in severalty. b. The property must be sold, with the proceeds from the joint tenant's share distributed to heirs. c. The tenancy remains, but the joint tenant's interest passes to heirs. d. The tenancy terminates, and the joint tenant's share goes to the state. a. The joint tenant's interest goes to the remaining joint tenants. If only one joint tenant is left, that joint tenant owns the property in severalty. You helped Frasier buy his penthouse condo. He's just received the keys and you two have said your goodbyes after closing, and you're heading back to the office to close out the transaction file. Which of your fiduciary duties continue? a. Accounting and loyalty b. Confidentiality and accounting a. Accounting and loyalty b. Confidentiality and accounting c. Confidentiality, loyalty, and accounting d. Reasonable skill and care, confidentiality, and loyalty b. Confidentiality and accounting With regard to contingencies, what responsibility does licensee Wanda have when representing buyers? a. She should avoid contingencies altogether because they tend to put sellers off. b. She should maximize the number of contingencies used to avoid being sued. c. She should use a standard set of contingencies with each buyer. d. She should use contingencies judiciously to protect her clients and the deal. d. She should use contingencies judiciously to protect her clients and the deal. With which approach to value does the appraiser analyze a property's ability to earn future income? a. Cost approach b. Income approach c. Sales comparison approach d. Taxable revenue approach b. Income approach Which federal lending act was introduced to combat lending discrimination in low- and moderate-income neighborhoods? a. Community Reinvestment Act b. Consumer Credit Protection Act c. Equal Credit Opportunity Act d. Home Mortgage Disclosure Act a. Community Reinvestment Act How large is an acre? a. 10,000 square meters b. 43,560 feet c. 43,560 square feet d. 5,480 square feet c. 43,560 square feet Federal fair housing laws prohibit ______. a. A 49-year-old, single woman from describing herself as such in an advertisement for a roommate b. An ad stating families with small children need not apply c. Evicting a tenant who sells drugs from the property d. Refusing to rent a property to smokers b. An ad stating families with small children need not apply In a life estate, all of the following apply during the term except ______. a. Control b. Ownership c. Possession d. Transferability d. Transferability Zoning regulations must be aligned with an area's ______. a. Comprehensive plan b. Government plan c. Majority opinions d. Political jurisdictions a. Comprehensive plan During a residential transaction, when must an Illinois seller's agent deliver a completed Residential Real Property Disclosure Report to a buyer? a. At least five days prior to closing b. Prior to showing the property to the prospective buyer c. Prior to the parties signing a purchase agreement d. Within three days after the parties sign a purchase agreement c. Prior to the parties signing a purchase agreement Which term refers to a permitted deviation from current zoning restrictions that allows an owner to use land for a purpose that's otherwise prohibited, and requires the owner to prove the zoning creates an unnecessary hardship? a. Moratorium b. Property variance c. Special use permit d. Use variance d. Use variance Last week, The Rialdis' listing agreement ended after months on the market and not even a single offer to show for it. Today, they received a call from Mindy, a real estate professional who would like to relist the property and has some new ideas for getting it sold. What approach is Mindy using to find listings? a. Expired listings b. Farming c. Owner sales d. Referral a. Expired listings Tim, a new buyer client, is pre-approved for a mortgage loan of as much as $250,000. This information can help to _______. a. Identify properties b. Inspect a property he has identified c. Research a property he is interested in d. Show him properties a. Identify properties What type of agency exists because a written or oral agreement is in place? a. Dual agency b. Express agency c. Implied agency d. Undocumented agency b. Express agency Which of the following statements about unlicensed assistants in Illinois is true? a. Unlicensed assistants can perform licensed activities under a managing broker's supervision. b. Unlicensed assistants can perform licensed activities under an affiliate broker's supervision. c. Unlicensed assistants can perform licensed activities under a sponsoring broker's supervision. d. Unlicensed assistants may not perform any activities for which a license is required. d. Unlicensed assistants may not perform any activities for which a license is required. In Illinois, when must the parties to the transaction reaffirm their original consent for dual agency? a. After the buyer has deposited earnest money b. Immediately after the brokerage agreement has been signed c. Prior to or at the time the parties sign the contract or lease for the transaction d. Prior to the inspection c. Prior to or at the time the parties sign the contract or lease for the transaction Licensees must obtain consent for dual agency representation at the time they enter into a brokerage agreement with a client. That consent must be reaffirmed no later than at the time the purchase or lease agreement is signed. It's not a good idea to post photos of your clients' expensive belongings. Why is that? a. It can attract the attention of thieves. b. It will decrease the market value of the property. c. It will discourage criminals. d. It will make the property less attractive to potential buyers. a. It can attract the attention of thieves. Bob wants an open listing agreement. Why might this not be in Bob's best interest? a. He'll have to pay multiple real estate commissions. b. He won't get full representation from any one licensee. c. It presents an inherent conflict of interest. d. It prevents him from selling the property himself and not paying a commission. a. 10 years b. Five years c. Three years d. Two years a. 10 years The Lanham Act gives companies the right to ______. a. A trial by jury b. Make misleading advertising claims less than 10% of the time, which is known as the Lanham Percentage Right c. Pursue clients by whatever means possible d. Sue competitors that are using deceptive claims in ads d. Sue competitors that are using deceptive claims in ads The power of the state to claim property when the owner dies without a will and without locatable heirs or creditors is also known as ______. a. Eminent domain b. Escheat c. Life estate d. Taking b. Escheat Agents owe fiduciary duties to their clients. Among these are loyalty, reasonable skill and care, confidentiality, accounting, and disclosure. Which fiduciary duty is missing from this list? a. Kindness b. Obedience c. Profitability d. Strategy b. Obedience George just applied for a conventional loan on a cottage he wants to buy. What percentage of the loan can he expect to submit as a down payment? a. 0% b. 20% c. 25% d. 5% b. 20% Which of the following best describes what an appraisal is? a. It's a broker price opinion. b. It's a comparative market analysis. c. It's an assessment of market value. d. It's an opinion of value. d. It's an opinion of value. Which of these is a recommended best practice after any discussion between a licensee and a client or other party involved in a transaction? a. Allow no more than 48 hours to pass without additional contact. b. Enter notes about the discussion in the property's listing in the MLS. c. Send a follow-up email to create a written record of the discussion. d. Send a hand-written thank you note. c. Send a follow-up email to create a written record of the discussion. Which agent role in Illinois is assumed by a designated agent who represents both the seller and buyer clients in the same transaction? a. Buyer's agent b. Dual agent c. Non-agent d. Seller's agent b. Dual agent How may the commission specified in a listing agreement legally be changed, according to the Illinois Real Estate License Act? a. The agreement may be amended by crossing out the original entry and writing the new commission amount. b. The amount is automatically increased by 1% if the commission will be shared with a buyer's agent. c. The commission change must be made in writing and signed by the parties to the agreement. d. The commission may be changed on the purchase agreement, which supersedes the listing agreement. c. The commission change must be made in writing and signed by the parties to the agreement. Dominic's seller clients want him to lower his commission rate. What's the best way for him to reply? a. "I base my fees on my services. Which services would you like to give up?" b. "No way!" c. "Sure!" d. "This is the standard rate in this market." a. "I base my fees on my services. Which services would you like to give up?" Which of these is an example of deceptive advertising in Illinois? a. Blake's listing closed on March 1, and he removed the listing from the MLS on April 15. b. Dan published his listing on the MLS with photos that showed professionally staged rooms. c. Jean described her listing's large back yard as, "Perfect for neighborhood barbecues!" d. Stav mailed postcards out to her farm area proclaiming, "Ready to sell your home NOW!" a. Blake's listing closed on March 1, and he removed the listing from the MLS on April 15. Keeping advertised information current is a requirement of Illinois license law and the NAR Code of Ethics. Blake should have removed his listing from the MLS promptly upon the closing of the sale. Whose consent and agreement are required to conduct a short sale? a. The buyer's attorney's b. The court's c. The lien holder's d. The seller's attorney's c. The lien holder's When using the farming approach, diversity is a key factor when identifying a neighborhood. Which statement best describes diversity? a. An area that is not currently farmed by another licensee b. An area that the licensee likes c. An area with a fair amount of listings—not too many, not too few d. An area with a variety or home styles, sizes, features, price points, amenities, buyers, etc. d. An area with a variety or home styles, sizes, features, price points, amenities, buyers, etc. Which portion of a mortgage payment is the financial institution's charge for the use of its money? a. Insurance b. Interest c. Principal d. Tax Interest is the amount charged for the use of someone else's money—in this case, the lender's. Bart and Claire are under contract for Claire to buy Bart's house, but her financing fell through. They decide to cancel the contract just as if it never happened. Which termination method does this describe? a. Reformation b. Release c. Rescission d. Restraint c. Rescission A rescission is a definitive end of the parties' commitments under an agreement—one in which the parties are returned to their pre-contract status. Which of these photo descriptions may be a potential MLS violation? a. A photo of the master bedroom, including the bed, dresser, and jewelry armoire b. Multiple exterior photos, taken in different seasons c. Photos taken after a professional cleaning service and stager spruced it up d. Wide-angle photos of the recently updated bathrooms and kitchen a. A photo of the master bedroom, including the bed, dresser, and jewelry armoire The ______ provides buyers with an approximation of the costs they're likely to pay at settlement. a. Closing Disclosure When an ______ is added to a sales contract, it changes the original terms of the contract. a. Addendum b. Amendment c. Annexation d. Appurtenance b. Amendment The earth's surface, extending downward to the center of the earth and upward to infinity, including permanently-attached natural objects, is called ______. a. Estate b. Land c. Real estate d. Real property b. Land For a deed to be valid, which two elements are required? a. Habendum clause and habeus corpus clause b. Signature of the grantee and habendum clause c. Signature of the grantor and habendum clause d. Signatures of the grantee and grantor c. Signature of the grantor and habendum clause Illinois licensee Kristal is in a designated agency relationship with a seller client. As a seller's agent, what agent type is she? a. Assigned b. General c. Special d. Universal c. Special Agreeing to a specific price, price range, or minimum or maximum charges among competing firms is an example of which type of antitrust violation? a. Group boycotting b. Market allocation c. Price fixing d. Tie-in arrangement c. Price fixing Where can you find out what's not covered by a title insurance policy? a. The county clerk's office b. The Internet c. The lender's attorney d. The title insurance policy's schedule of exceptions d. The title insurance policy's schedule of exceptions After signing a purchase contract, buyer Pam and seller Waylon both realize that the address for Pam's newly-purchased home reads "344 Beverly Way" instead of the correct address: "334 Beverly Way." Which of the following is true about this situation? a. Pam has clear evidence that Waylon tried to trick her. b. Pam or Waylon can void this contract and present a new one with the correct address. c. The contract is invalid because there is no offer and acceptance. d. This is definitely a case of fraud. b. Pam or Waylon can void this contract and present a new one with the correct address. What's the difference between an exclusive right-to-sell and an exclusive agency agreement? a. No commission is earned if the seller locates the buyer with exclusive agency. b. No permission is required for dual agency with an exclusive right to sell. c. One is for buyers, and one is for sellers. d. They are two names for the same thing (no difference). a. No commission is earned if the seller locates the buyer with exclusive agency. What's it called when a person who has possession of a property through a life estate abuses the property or allows it to deteriorate? a. Act of waste Which of these actions must the seller in a residential transaction take under the Illinois Radon Awareness Act? a. Perform a test for radon levels using an IEMA-approved test kit. b. Provide the buyer with a list of licensed radon-mitigation companies in the area. c. Provide the buyer with required forms related to radon hazards and their known presence on the property. d. Take approved measures to mitigate for radon if high levels are present. c. Provide the buyer with required forms related to radon hazards and their known presence on the property. What type of loan may be used if the buyer is obtaining seller financing? a. Graduated payment mortgage b. Pledged account mortgage c. Purchase money mortgage d. Wrap-around mortgage c. Purchase money mortgage Nina signed an exclusive buyer agency agreement with Ken, her client. Ken buys a property from another agent. What might happen? a. Ken may owe commission to Nina. b. Ken may void the transaction. c. Nina may void the transaction. d. Nothing; buyers are free to work with whomever they choose. a. Ken may owe commission to Nina. The zoning ordinances changed 10 years after Stan built his home, and it was grandfathered into the current zoning through nonconforming use. Now Stan is selling the home. Which of the following is true regarding the new owners' responsibilities to comply with zoning regulations? a. They'll have to apply for new zoning. b. They'll have to comply with the current zoning. c. They'll have to get an area variance. d. They're able to continue nonconforming use. b. They'll have to comply with the current zoning. This statement is part of a promissory note attached to a security instrument: "I have the right to make payments of Principal at any time before they are due." What's the name of the clause where this statement is included? a. Lock-in clause b. Penalty clause c. Pre-payment clause d. Principal clause c. Pre-payment clause We have an expert-written solution to this problem! If a buyer you represent waives the inspection, what should you do? a. Congratulate yourself—this is going to be an easy deal b. Get the waiver in writing c. Hire an inspector anyway d. Perform it yourself b. Get the waiver in writing Blake recently negotiated a net lease for space in an office building he owns. Under a net lease, the tenant pays ________. a. All of the property expenses b. All of the property taxes c. A portion of the property expenses d. No rent c. A portion of the property expenses With a net lease, the tenant pays a portion of the property operating expenses, typically the utilities. Which laws does the Office of Fair Housing and Equal Opportunity uphold? a. Civil rights laws b. Equal opportunity laws c. Federal fair housing laws d. The Fair Housing and Equal Opportunity Act c. Federal fair housing laws The Office of Fair Housing and Equal Opportunity (FHEO) provides administration and enforcement of federal fair housing laws.